The Impact of COVID-19 on the Retail Industry: A Case Study of Tesco

Title: The effect of
COVID-19 on the
retail industry. A case
study of TESCO

Table of Contents
INTRODUCTION......................................................................................................................4
Research Background.............................................................................................................4
Research Aim.........................................................................................................................4
Research Objectives...............................................................................................................5
Research Questions................................................................................................................5
Literature Review.......................................................................................................................5
Impact of the pandemic on various retail companies and outlets in UK...............................5
Strategic and operational challenges faced by Tesco amidst the pandemic...........................7
Ways in which Tesco overcame the pandemic using strategic action and change in its
operations...............................................................................................................................8
Discussion of the secondary and primary research....................................................................9
Research methodology...........................................................................................................9
Research Philosophy..............................................................................................................9
Research Method..................................................................................................................10
Data collection method........................................................................................................10
Ethical consideration............................................................................................................11
Limitation.............................................................................................................................11
Critical review of the results of the research............................................................................11
Recommendation and action plan............................................................................................17
CONCLUSION........................................................................................................................20
REFERENCES.........................................................................................................................21
Books and Journals:.............................................................................................................21
Online:..................................................................................................................................22
APPENDIX..............................................................................................................................24
Questionnaire.......................................................................................................................24

INTRODUCTION
Research Background
Today’s business environment is becoming complex in nature as every day there are
many external environmental factors which provide a direct or indirect influence on
organisation. It becomes necessary for organisation to find out the external environment
factors and analyse them so that they are able to take right measures (Grané, Albarrán and
Merchán, 2021). The current example of external environment factor is COVID-19 that
provided a severe impact on each and every sector. It is found that the most affected sector is
retail sector or industry. It is identified that the drastic changes caused by COVID-19 in the
external environment provided various effects on business in the retail industry. This report
aims to analyse the impact of a pandemic on the retail industry with a special reference to
Tesco. Tesco is a British multinational organization that currently runs the business not only
in one country but in many countries. They are facing many complexities due to the
pandemic which will be examined in the report.
It is necessary for an organisation to understand the impact so that they are able to
analyse how much the external environment becomes drastic for the company. It is found that
due to the government's request, the retail business handles all the daily and food necessities
such as supermarket stores which remained in good condition. But retailers which have
deemed known essential goods and services such as apparel and home appliances stagnated.
It is found that COVID-19 pandemic provided a negative impact on the sales of company
(Impact of the coronavirus (COVID-19) pandemic on retail sales in 2020, 2021). This is
necessary to understand that the retail industry is an important part of the UK economy as it
contributes almost 5.1% of GDP in the UK. Due to the imposition of long-term restrictions
and social distancing, the retail industry has been impacted which results in changes in goods
and services that are consumed by consumers. It is identified in 2020 that the total retail
volume decreased by 1.9% 2019. It was the largest annual fall in retail sales on record. This is
the reason for choosing this topic. This research will helps an organisation to critically
analyse the impact of pandemic.
Research Aim
The aim is to analyse the impact of the COVID-19 pandemic on strategic planning and
operations of UK's retail industry using Tesco as a case study.

Research Objectives
1. To analyse the impact of the pandemic on various retail companies and outlets in UK
2. To examine the strategic and operational challenges faced by Tesco amidst the
pandemic
3. To evaluate the ways in which Tesco overcame the pandemic using strategic action
and change in its operations
Research Questions
1. What is the impact of the pandemic on UK's retail companies?
2. What are the strategic and operational challenges faced by Tesco amidst the
pandemic?
3. What are some of the ways which Tesco overcame the pandemic using strategic
action and operational changes?
Literature Review
Impact of the pandemic on various retail companies and outlets in UK
According to The impact of the global pandemic on the retail industry, 2021, the
second wave of endemic left all the countries devastated and shocked. When countries are
struggling for getting back to normalcy then the entire sector has an impact in unprecedented
ways. It is identified that pandemic increase E-Commerce and digital transformation which
create a paradigm shift in consumer behaviour. Due to the change in consumer behaviour
towards online shopping for essential and nonessential goods and services, it is identified that
organization needs to re-imagine and adapt for the delivery of customer experience digitally
and physically. According to the report of McKinsey, it is found at 96% of consumers have
now adopted new shopping behaviours. In this figure, 60% are expected to shift toward
online shopping and continue for a pandemic. At that time, consumers were forced to buy in
bulk which increase stocking as well as financial constraints. It is identified that the pandemic
situation is provided a negative impact on retailer seals as it increases The E-Commerce
business which reduces the sales of retailers. Those dealers who are not provided essential
goods were restricted to open their stores as only essential goods and services are permitted
to open their stores. It was a shock for the retail sector as the business was stuck. It is not only
provided on their sales but also provides a similar impact on their profitability. It is found that
due to decreases in sales and profitability company has to stop their business. There are many
organisations which are not started after the pandemic even after the post-pandemic
situations. They are not able to survive in the market because of the pandemic which provider

a severe impact on economic situations. There were many restrictions found in the retailers
which provided an impact on the business negatively.
According to Coronavirus: impact on the retail industry worldwide - Statistics &
Facts, 2021, There are many countries that are gradually lifting the restriction measures after
more than one year of highly infectious virus which they imposed for closure of non-
necessity stores and venues. Now countries are focusing on lifting a ban on large public
gatherings. It is found that due to the pandemic, the retail industry faces many substantial
shifts and the retail seals have already dropped between 2019 and 2020. It is found that there
are many sectors that have witnessed growth as increases in sales of consumer goods in
heavily affected countries such as Germany, the United Kingdom, Italy, and Germany. The
reason for the increase in the business because grocery stores were always remained open. It
is found that in the UK the online retail sales stayed in 2021.
According to COVID-19 and the retail sector: impact and policy responses, 2020,
consumer behaviour was changed due to social distancing as they are avoiding the stores.
This change found because of pandemic situation where they are restricted to go to stores and
because of it, they are facing many problems for goods and services. They are not allowed to
go anywhere and many stores were remained closed. Due to this, it is found that consumers
are shifting their priorities towards online shopping. This change in consumer behaviour is
make pressurising on organisation as they need to change the business world by digitally. It
becomes necessary for them tp transform the business by digitally so that they will be able to
offer goods and services online to the customers. It is also found that pandemic is not only
provide an impact on retail sector as it provide an impact on each and every sector which
were restricted to open or limited to meet with people. After pandemic, the situations are
become changed as now companies need to rethink for their business structure which will be
become very tough for organisations. To restructure of organisation is not an easy task as it
includes the drastic changes in all over the business. It requires lots of expert knowledge and
experience to implement and execute the plan.
According to Naseri, 2021, it is identified that pandemic is not only provide negative
impact on retail sector as it provides positive impact also. The positive impact was for the
companies that provides groceries stores. Groceries stores were remained open and they
found an increase in the sales because people have a fear to not meet the essential goods and
services in future due to restrictions in public gathering and social distancing.